Walpole Commentary | Immigration Bill

In light of the publication of the government’s Immigration Bill, we examine the key features of the new policy and the potential impact on the British luxury sector.

As many of you will have seen in the news, the UK government has published details of its new Immigration Bill, which comes into effect from 1st January 2021.

The key features of the bill include:

– Visas to work will be granted on a points-based system and a total of 70 points will be required to apply for a visa

– All migrants will have to speak English to a specific level (worth 10 points in the new system)

– There is no route into the UK for general low-skilled or temporary workers and no route for self-employed people coming into the UK

– Anyone wishing to come to the UK to work must have a job offer with a salary threshold of £25,600. There is a lower threshold in roles there are skills shortages e.g nursing and for those who have a relevant PhD in a STEM (science, technology, engineering and maths) subject

– The skills threshold for foreign nationals who want to work in the UK will be lowered from degree to A-levels or their equivalent

– The cap on the numbers of skilled workers is being scrapped and there will be a more level playing field for skilled workers from all countries wanting to come to the UK to work

At present,  the Settled Status Scheme enables EU nationals who are currently living in Britain to obtain indefinite leave to remain in the UK post- Brexit and EU nationals have until 20 June 2021 to apply for pre-settled/settled status.

Impact for the British luxury sector

As the customer for British luxury is global, the sector has long attracted workers from around the world to design, produce, serve its goods and experiences which has enriched the cultural diversity of teams and enabled the UK and London to flourish as a creative and commercial luxury hub. Likewise, the European nature of the luxury sector, and the heavily integrated relationship the UK has as part of Europe (regardless of membership of the political institution) was recently reinforced by new research from Bain which examined factors such as supply chains, retail, tourism and creative and business institutions as part of the European business model.

In the UK, 90% of UK luxury brands employ non-UK EU nationals in their business, and for many companies almost 40% of their workforce are EU citizens. With such a tight deadline before implementation and no specific route for ‘low-skilled’ migrants to come to Britain once free movement ends at the end of this year, many British luxury companies will find it challenging if not impossible to recruit the employees they need across their businesses; a point that Walpole has made via feedback to the Migratory Advisory Committee (MAC) on several occasions.

Another concern for British luxury is the definition of ‘low-skilled’ in the context of the Immigration Bill. Walpole welcomes the lowering from degree to A-levels or their equivalent as a threshold for entry. However, roles such as bi-lingual retail employees, catering and hospitality staff, some seasonal employees and leather and textile workers, which the government classifies a low-skilled, are not regarded as such by luxury employers. As one Walpole member, which manufactures 100% of its goods in the UK, described its ‘low-skilled’ overseas employees: “their undoubted skills are not formally qualified”, meaning in the new points-based system they would not be eligible for a work visa.

There is also uneasiness around wage inflation and the impact that will have on the competitiveness of London as a destination for the affluent visitor.

The British luxury sector is already facing a skills shortage and whilst many Walpole members have invested heavily in creating world-class training and apprenticeship schemes to develop domestic talent, there are short to medium term implications around access to workforce that we would prefer to see being taken into consideration in the proposed Immigration Bill. Walpole’s own work to address UK luxury skills shortages, for example, through its secondary education and schools programme, Tomorrow’s Talent, is a long-term scheme with a five to ten-year outlook.

Luxury is one of the fastest growing and most successful industries in the UK, it is worth £48bn to the UK economy and forecast to reach £65bn by 2024. However, whilst Walpole understands the desire of the government to deliver its full mandate on Brexit, it also encourages the government to recognise the value that the UK gains by ensuring that a suitable policy framework is in place that enables British luxury to continue its growth trajectory and put it is the best position to promote Brand Britain around the world.

Please contact carly.vonspeyr@thewalpole.co.uk for further information.

(Image courtesy Method Studio, © Graeme Hunter Pictures)